international marketing management: nature & scope by elisante ole gabriel (tanzania) chartered...

INTERNATIONAL MARKETING INTERNATIONAL MARKETING MANAGEMENT:MANAGEMENT:

NATURE & SCOPE NATURE & SCOPEBy By

Elisante Ole Gabriel (Tanzania)Elisante Ole Gabriel (Tanzania)Chartered MarketerChartered Marketer

[email protected]@edenconsult.net, , www.olegabriel.comwww.olegabriel.com+255-784-455-499+255-784-455-499

mailto:[email protected]

http://www.olegabriel.com/

[email protected], [email protected], 0784-455-49955-499

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KEY AREAS TO BE COVEREDKEY AREAS TO BE COVERED

Nature and Scope of International BusinessNature and Scope of International Business International Business EnvironmentInternational Business Environment International Markets entry strategiesInternational Markets entry strategies The Role of World Trade OrganisationThe Role of World Trade Organisation Management Tools for International Management Tools for International

BusinessBusiness International Payment systems & RisksInternational Payment systems & Risks


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NATURE & SCOPE OF IMMNATURE & SCOPE OF IMM Deriving from the word ‘International’ it Deriving from the word ‘International’ it

suggests that IBM is about managing suggests that IBM is about managing business between nations.business between nations.

These nations could be separated by These nations could be separated by ‘geographical’ or ‘Political’ boundaries.‘geographical’ or ‘Political’ boundaries.

Think of Tanzania & Malawi Vs Tanzania & Think of Tanzania & Malawi Vs Tanzania & Kenya at the scenario when we shall have Kenya at the scenario when we shall have the EACM (East African Common Market)the EACM (East African Common Market)


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GlobalizationGlobalization

This is a concept considering the whole world as one huge homogeneous market. This is a concept considering the whole world as one huge homogeneous market.

Globalisation is hinged on a number of assumptions. It is however on two major Globalisation is hinged on a number of assumptions. It is however on two major

dimensions:dimensions:

• Globalization of productionGlobalization of production

• Globalization of marketsGlobalization of markets


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Competition

Consumer

Marketing Challenges in country Z

Marketing Challenges in country Y

Marketing Challenges in country X

Place

Promotion

Price

(Controllables)

Product

Legal

Socio Cultural

Competition

Political

Economic

Infrastructure

Domestic Environmental Challenges

(Uncontrollables)

Political

Overseas Environmental Challenges (Uncontrollables)

Legal

LogisticsGeography

Economic

Domestic marketing and international marketing decisions


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Reasons for entering international Reasons for entering international marketsmarkets

• growth

• profitability

• achieving economies of scale

•Achieving economies of scope (re-usability)

• risk spread

• access to imported inputs

• uniqueness of product or services

• marketing opportunities due to life cycle

• spreading R&D cost


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Key issues in export growth• Developing a proactive approach to international

trade

• Promoting Foreign Direct Investments

• Promoting Competitiveness

• Simplification of procedures

• Encouraging large-scale manufacturers

• Reducing transaction costs

• Infrastructure development


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Identifying opportunities in international markets

• Extreme focus product strategy

• Products-country matrix strategy

• Growth-share matrix of exports

• Market focus strategies


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MODES OF ENTREING INTERNATIONAL MARKETS

This is an institutional mechanism by which a firm makes its products or services available for consumers in international markets.

• Mode of entry is determined by:

- the ability and willingness of the firm to commit

resources

- the firms’ desire to have a level of control over

international operations

- the level of risk the firm is willing to take


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Modes of international market entry

Production in home country

Exports: production is carried out in home country and finished goods are shipped to the overseas markets for sale

indirect exports: process of selling products to an export intermediary in the company’s home country who in turn sells the products in the overseas markets

direct exports: process of selling the firm’s products directly to an importer in the overseas market


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Modes (contd)

complementary exporting: use of distribution channels

of an overseas firm to make the product available in the

overseas market

provide offshore services: This is to support the overseas

clients with the help of information and communication

technology


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Production in a foreign country

• contractual entry modes

international licensing: process by which a domestic

company allows a foreign company to use its intellectual

property and specific business skills for a compensation

(royalty)

international franchising: transfer of intellectual property

and other assistance over an extended period of time with

greater control compared to licensing

Modes (contd)


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overseas turnkey projects: conceptualize, design, install, construct, and carry out primary testing of manufacturing facilities or engineering structures for an overseas client organisation

types : built and transfer (BT), built, operate, and transfer (BOT), built, operate, own (BOO)

international management contracts: a company provides its technical and managerial expertise for a specific duration to an overseas firm

Modes (contd)


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international strategic alliance: the relationship between

two or more firms that cooperate with each other t o

achieve common strategic goals but do not form a

separate company

international contract manufacturing: a contractual

arrangement under which a firm’s manufacturing

operations are carried out in a foreign countries

Modes (contd)


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Investment entry modes

assembly in overseas markets: refers to exporting various

components of the product in completely knocked down

(CKD) condition and assembles them overseas

international joint ventures: equity participation of two or

more firms resulting into formation of a new entity

Modes (contd)


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Factors for selecting partners for cooperation

• The alliance partner should have some strength which

can be translated into business values for the alliance

• The alliance partners should be committed to

cooperative goals

• It is preferable that the alliance partner should have

multi-cultural business environment


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Wholly owned foreign subsidiaries

• To have complete control and ownership of

international operations a firm opts for foreign

direct investment through:

1. acquiring a foreign company and all its resources in

a foreign market (acquisition)

2. the establishment of production and marketing

facilities by a firm on its own from scratch (green field)

Factors (contd)


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Factors affecting the selection of entry mode

External factors

• Market size

• Market growth

• Government regulations

• Level of competition

• Level of risk• political

• economic

• operational

• Production and shipping costs


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Internal factors

• Company’s objectives

• availability of company resources

• level of commitment

• international experience

• flexibility

Factors affecting the selection of entry mode (contd)


2020

Benefits of IMMBenefits of IMM

More opportunitiesMore opportunities Avenue for learning new concepts and Avenue for learning new concepts and

challengeschallenges Possibility of developing a global brandPossibility of developing a global brand A room to benefit from economies of scale & A room to benefit from economies of scale &

scopescope Spread of risks … ANDSpread of risks … AND Wider scope for innovation and creativity.Wider scope for innovation and creativity.

Finally

international marketing management: nature & scope by elisante ole gabriel (tanzania) chartered...

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